India's lower house of parliament passes key tax reform bills
- Author: Zachary Reyes Apr 02, 2017,
Apr 02, 2017, 17:26
The Central GST Bill, 2017; the Integrated GST Bill, 2017; the GST (Compensation to States) Bill, 2017; and the Union Territory GST Bill, 2017 were passed after the negation of a host of amendments moved by the opposition parties.
He added that any introduction of new law must emphasize on how much convenient or comfortable it would be to the majority of the population which constitutes the poor families.
Replying to around eight hour long debate, Finance Minister Arun Jaitley said the GST will replace various indirect taxes with a new tax regime which will ensure free flow of goods and services across the country. The GST Bills approved by the Lok Sabha now needs state level discussions inside State Assemblies, before being implemented pan-India.
The Bill later acquired the support from legislatures across the country, which finally led to its establishment. With the day's development, the government said it was readying itself for the July 1 rollout of the landmark indirect tax legislation.
The GST law says in case of casual taxable person, he/she would have to pay taxes in advance by making an estimate of the sales. A similar tax will be levied by states through a separate State-GST law.
Or, GST will create something like a common market, wherein all goods and services, irrespective of their point of origin or transaction, would have a common treatment and a common, capped rate.
States should not ratchet up rates as the GST (Compensation to States) Bill rightly guarantees them full compensation for five years for any revenue loss, in relation to a normative growth from the revenue earned in 2015-16, during the transition. This is biggest tax reform since Independence of India as claimed by Government.
This will simplify the tax procedure for both government and public.The bills will now be presented in the Rajya Sabha or Upper House of Parliament.
The Council will also start work on fitting goods and services in the tax slabs, which will be recommended by a committee of officers next month.
The GST Council has come up with a four-tier tax structure - 5, 12, 18 and 28%. Responding to members' questions, the Minister said under the GST, for one commodity there will be only one tax rate in the country. This make sense, and will partially safeguard revenues of the Centre and states.
Allaying fears on GST increasing the cost of services, Adhia said that the main component of transport - petrol and diesel - is zero-rated under GST and for most of the other services, rate of tax will be less than 18 per cent.
He said, the State is concerned about the impact of GST on its fiscal autonomy.
The Council is also likely to review the preparedness for the introduction of GST, including that of the administration and migration of assessees to the GST Network.